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Harvard Says HODL, CRV Swings Wildly, and Staked ETH Withdrawals Undergo Testing

At a glance:

  • Mango Markets exploiter hits again
  • Jesse Powell brings Proof of Reserves into question
  • Staked ETH withdrawals enter test phase
  • Harvard paper points to hedging with Bitcoin

Overall a productive week in the world of crypto as DeFi protocols continue to survive repeated stress testing brought on by recent FTX events and a short-selling exploiter. Market sentiment has consolidated as Bitcoin and other Layer-1 blockchains move to the forefront while altcoins tag along.

Top Market Trends

  • Kraken Founder, Jesse Powell, questioned on Twitter whether having a transparent proof of reserves for crypto exchanges is sufficient when liabilities are not also transparent.
  • Blockchain surveillance firm Chainalysis was identified as one of FTX’s creditors during bankruptcy proceedings. Chainalysis and FTX partnered in 2019 to revamp FTX’s AML and KYC systems.
  • The Ethereum Foundation is readying to test withdrawals for staked ETH with the Shandong testnet. Ethereum developers also are considering multiple EIPs as part of the upcoming hard fork, Shanghai, which will unlock staked ETH withdrawals on the Beacon Chain.
  • CRV price saw a 75% swing as Mango Markets exploiter Avraham Eisenberg attempted a short position only to have it backfire. Eisenberg borrowed 88 million CRV tokens from Aave (AAVE) and began selling until on-chain sleuths began opening long positions to revive CRV price. Some analysts theorized that the CRV short positions were a distraction from a bigger exploit targeted at Aave.

Movers and Shakers

Top 7-day Gainers:
HT +56.7%
CRV +33.5%
DASH +23.6%
LTC +21.0%
CSPR +14.0%

Top 7-day Losers:
CHZ -34.5%
XRD -26.9%
XCN -19.6%
ALGO -17.3%
BNB -10.6%

Pro Tip: QUAD Airdrop Incoming!

🪂 The final snapshot for Quadency’s Airdrop will be taking place Saturday Nov 26th before the airdrop claim period starts on Dec 1, 2022.

Check out the deets to qualify here:

Technical Summary

Bitcoin Pulse
Bitcoin underwent mid-week volatility but we ended right where we started, at the $16.6 support level. We saw a noted jump in Bitcoin price after Wednesday’s FOMC meeting confirmed the slowing down of Fed rate increases.

  • El Salvador created the National Bitcoin Office to handle crypto-related initiatives and submitted a bill to regulate cryptocurrencies outside of trade-fi.
  • Bitcoin’s 14-day RSI failed to break the ceiling at 41.00 and is currently tracking at 40.04, with neither bears nor bulls controlling market sentiment.
  • Cathie Wood said Bitcoin may need to go through more crises so investors can discover the survivors; says BTC could go to a $1 million.

BTC - Low Timeframe
After the early week purge of the 10th November low, we have continued to see bullish momentum push price higher, targeting premium of the current daily range.

”BTC-Micro-TA="95%"Will we see a retest of the 50 EMA?

As we end the current trading week, price is at equilibrium of the range as it pulls in orders from both buyers and sellers to generate the liquidity needed through accumulation to fuel the next move.

At this point, we could see two scenarios take place:

  1. The first is we see continued bullish momentum up into the $17,000-$18,000 price range, which coincides with bearish order-blocks, the filling of fair-value gaps, and achieving premium prices.
  2. Alternatively, we could see end-of-week selling pressure enter the market, pushing price down into deep discount of the current range and potentially finding support at one of the bullish order-blocks.

We would see the filling of fair-value gaps and a transfer of order-flow take place if this were to happen, to fuel deeper retracements to the upside potentially. If the bullish scenario is to take place we could see a retest of the 50 EMA be a visual catalyst to signal this continued bullish momentum.

BTC - Macro View
On the HTFs, we may be seeing signals that BTC is nearing its bottom where a continued slow, gradual decline to the $14,000 level takes place.

”Bitcoin-Macro-TA="95%"Bearish liquidity purges may reemerge

As we can see, unlike previous bearish moves that have taken place since late 2021, when price is purging previous supporting lows we are not seeing huge price movements. Price is, in fact, failing to sustain itself below the purge level and going lower.

Instead, we are seeing BTC price instantly push back into the previous range and form a descending accumulation schematic nature. This usually signals that sellers are starting to become exhausted as well as buyers meeting all selling pressure.

This type of nature is similar to that of the May-June 2021 price action before the bullish run from $35,000-$70,000.

However, we must remember from a standpoint of market psychology, large market turns happen when the majority of participants are calling for the opposite directional move. So similar to that of the 2018 and early 2019 moves, we may see a sharp bearish liquidity purge testing prices not seen for a few years before the bullish trend emerges.

Altcoins on the Move
CRV and AAVE had a tumultuous week as both protocols appeared to be the new targets of the Mango Markets exploiter. Huobi’s HT was the week’s top performer, rising over 45% on the news of their upcoming expansion to Europe, Southeast Asia, and other regions.

  • Ethereum (ETH) and most altcoins followed BTC in a plunge to start the week, followed by a substantial clawing back.
  • Avalanche (AVAX) transaction volumes surged to a new all time high amid growth of its DFK Chain subnet during Q3 2022.
  • stETH (Lido staked ETH) started trading at a discount to ETH with 3% gains over the 7-day.

Ethereum Macro
On ETH/USD, we have seen price range within the bearish volatility leg formed in previous weeks and we now await commitment to a given direction.

”ETH-Macro-Technical-Analysis="95%"Will our last bastion of support hold?

Given that price has mitigated an extreme bullish order-block that is currently acting as key support; as well as having an open daily fair-value gap above; we could feasibly see a bullish move into the $1400 level and interact with the 50EMA.

At that point, we would look for signals of rejection of the 50EMA and other resistance levels or, if price is re-accumulating, for continued bullish momentum.

Alternatively, we would look for price to go to the absolute extreme of the current range and purge the engineered liquidity at below the psychological $1000 level and wait to see if price provides us signals that our last bastion of support is holding.

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